To simplify, Germany's co-determination policy states that, for large companies, virtually 50% of the seats on the Board of Directors must be elected by the workers.

In theory, this arrangement should influence the bottomline of companies as the Board is no longer controlled fully by shareholders.

I'm curious how German co-determination policy has played out in practice, specifically:

  1. Has this policy improved labor condition in Germany compared to other countries that do not have the same policy?

  2. Has this policy reduced friction (negotiation breakdown) between industry and labor union?

  3. Has this policy produced unexpected outcomes compared to the expectations of the legislators who made them?

1 Answer 1


As someone who works for a German company, workers rights seem to be in reasonably good shape where the widespread protections apply. But I think it is impossible to correlate this outcome with any one measure. Consider

  • the nature of trade unions and union-negotiated salaries in Germany, as compared e.g. to the United States,
  • the role and the legal protections for the works council (Betriebsrat), with or without union participation,
  • the protections against dismissal for individuals, unless for cause.

I find all those much more relevant.

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